Correlation Between Ivanhoe Energy and Fortune Bay
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Fortune Bay at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ivanhoe Energy and Fortune Bay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Fortune Bay Corp, you can compare the effects of market volatilities on Ivanhoe Energy and Fortune Bay and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ivanhoe Energy with a short position of Fortune Bay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Fortune Bay.
Diversification Opportunities for Ivanhoe Energy and Fortune Bay
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ivanhoe and Fortune is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Fortune Bay Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Bay Corp and Ivanhoe Energy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ivanhoe Energy are associated (or correlated) with Fortune Bay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Bay Corp has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Fortune Bay go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Fortune Bay
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 4.29 times less return on investment than Fortune Bay. But when comparing it to its historical volatility, Ivanhoe Energy is 1.17 times less risky than Fortune Bay. It trades about 0.01 of its potential returns per unit of risk. Fortune Bay Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Fortune Bay Corp on September 1, 2024 and sell it today you would lose (1.00) from holding Fortune Bay Corp or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Ivanhoe Energy vs. Fortune Bay Corp
Performance |
| Timeline |
| Ivanhoe Energy |
| Fortune Bay Corp |
Ivanhoe Energy and Fortune Bay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Fortune Bay
The main advantage of trading using opposite Ivanhoe Energy and Fortune Bay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Fortune Bay can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fortune Bay will offset losses from the drop in Fortune Bay's long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
| Fortune Bay vs. Eros Resources Corp | Fortune Bay vs. Lupaka Gold Corp | Fortune Bay vs. Black Widow Resources | Fortune Bay vs. Magnum Goldcorp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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